Market Analysis and Trades for 8/7

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The weekly post for SPY 0.00%↑ and QQQ 0.00%↑ should be reviewed prior to this. Both the written portion and the video can be found here: Market Analysis for the Week of 8/3

Sellers certainly didn’t find follow through today. I’ll recap NQ because it was clearly more important today. After taking out yesterday’s overnight low, it appears that the Trump signals chat group got word of a major deal regarding AAPL 0.00%↑ (half kidding but only half) and they loaded the bid after the 23022.75-23045.5 hold and triggered the LBAF of yesterday’s low. Following the reclaim of 23146.75-23159 price tested and rejected 23223-23237 and traded back down for a fresh LBAF of yesterday’s low. Rinse and repeat. The open traded between the above levels, and then it seems the market got word of the details of the deal. Index calls were absolutely slammed with all of the love going into NQ. It absolutely ripped to the critical 23424.75-23438 spot at high of day. This dragged ES higher with it, finally popping yesterday’s ETH high on a small attempted spike into the close.

The LBAF was a bad look for sellers. If it had been a cash hours LBAF I would have been long, but kept an open mind into cash.

I had stopped out of the remainder of my ES short runners overnight but chose to give sellers the benefit of the doubt for the initial balance (first hour of cash trading) to see if they could get a test of yesterday’s low. I was on the short side which worked “okay,” but there was no sign of any meaningful seller for follow through and I stopped out on runners again. Having chosen the short side, I missed the huge move up because of it. Once the IB high broke with conviction and multiple sets of single prints were put in, there was no short to be had but also no real pullback to get long. It is okay to be wrong (I don’t like it), but I couldn’t stay wrong at least on index day trades. It is good to get a humbling once in a while and I won’t pretend (like some others) to get it right every time with my own trading.

We are still in a multi-week balance and can continue to see two-way trading. Sellers failed to follow through today, will buyers follow through tomorrow? Today was rather bullish after yesterday was rather bearish. As mentioned above, NQ reached an absolutely massive spot, and ES didn’t really make much headway. A failure to see direct continuation following this move could result in a significant retrace to the downside. A sustained break to the upside through a key level opens new highs.

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